Tuesday, August 27, 2013

Court drafted wills

One of the more fundamental developments in relation to estate planning in recent years has been the introduction in most Australian states of government legislation empowering courts to make wills on behalf of people who otherwise lack the capacity.

There have been an increasing number of cases to go through the courts in this area. The recent Queensland case of Re Matsis; Charalambous v Charalambous & Others [2012] QSC 439 is particularly interesting as it appears to be the first case that allowed a court-ordered will where the primary objective was not because the relevant incapacitated person had no will at all. Rather the situation was that the pre-existing will did not achieve the appropriate asset protection and tax planning objectives of the ultimate beneficiaries.

The case involved a businessman who had accumulated some millions of dollars of wealth and who had signed an 'interim' will, which did not incorporate any testamentary trusts, sometime before losing capacity to dementia.

On the application of the ultimate beneficiaries, the court allowed them to introduce comprehensive testamentary trust provisions into the will as if they were inserted before the will maker's death.

Next week's post will focus on some of the key aspects that the court took into account before allowing the variation to the will.